Elgar original reference
Edited by Anis Chowdhury and Iyanatul Islam
Introduction: Northeast Asian Economic Development: Which Way Now?
Iyanatul Islam and Anis Chowdhury Setting the context In 1983, the Nobel Laureate Amartya Sen, posed an important question. ‘Development’, he asked, ‘which way now?’1 At the time, ‘traditional development economics’, as Sen put it, was under attack from economists with conservative proclivities. They admonished policy-makers in the developing world for adhering to the ‘dirigiste doctrine’ – a doctrine that held sway since the end of World War II. Based on the notion that the state should be the engine of growth, policy-makers in many developing economies adopted importsubstituting industrialization as the path to self-sustaining growth, and generally intervened in both product and factor markets quite extensively. Often, elaborate ﬁve-year plans were drawn up to underpin a state-led strategy of industrialization. Against the background of a turbulent international environment in the 1970s and early 1980s, characterized by oil price shocks, worldwide inﬂation and external debt crises, conservative economic thinkers wanted to liberate the developing world from the ‘poverty of development economics’.2 They enunciated a brave new world in which the private sector rather than the state, and export orientation rather than import substitution, would be the key drivers of growth. A small group of countries in Northeast Asia, most notably Singapore, Hong Kong, Taiwan and South Korea, were often held up as rare exemplars that managed to go against the prevailing inﬂuence of the dirigiste doctrine since the 1960s and earned the enviable distinction of being some of the fastest-growing economies in the world. More importantly, they became...